NAIROBI (CoinChapter.com) — As the 2024 Bitcoin halving approaches, with fewer than 100 blocks remaining, interest in the event has surged to unprecedented levels. Recent Google Trends data reveals that searches for “Bitcoin halving” have reached a score of 45 and are expected to climb to 100 by month’s end, marking the highest level of public curiosity about the event to date.
The Bitcoin Halving Supply Shock
Bitcoin’s supply is meticulously regulated, with the protocol’s ingenious design ensuring that only 21 million bitcoins can ever be minted. The halving event is a pivotal mechanism, reducing the rewards for mining new blocks by half every 210,000 blocks, approximately once every four years.
At the core of the Bitcoin halving is a programmed event that cuts the reward for mining a Bitcoin block in half. The original mining reward was 50 BTC per block, but it has steadily decreased with each halving. Currently, the reward stands at 6.25 BTC per block, and the 2024 halving will cut it further to 3.125 BTC.
The halving cuts the supply of new Bitcoins, creating artificial scarcity. This supply shock is a key factor in Bitcoin’s potential for long-term price appreciation.
Historically, Bitcoin’s Price Patterns
Historically, Bitcoin’s price has tended to drop in the immediate months following a halving before embarking on a multi-year bull run. After the 2012 halving, Bitcoin took roughly 525 days to hit a new all-time high. The 2016 and 2020 halvings followed suit, with Bitcoin reaching new peaks after 518 and 545 days, respectively.
Examining the historical precedents set by the previous three halving events can provide valuable insights into the potential impact of the upcoming fourth halving.
The first halving occurred on November 28, 2012, reducing the block reward to 25 BTC from 50 BTC. At the time, the price of Bitcoin stood at $13, but it subsequently soared to a new high of $1,152 in the following year.
The second halving, on July 16, 2016, saw the block reward cut to 12.5 BTC, with the price at the time being $664. The following year’s peak reached a staggering $17,760.
The third halving, on May 11, 2020, reduced the block reward to 6.25 BTC, with the price at $9,734. The subsequent all-time high was reached at $67,549.
What Can We Expect This Time?
As the Bitcoin halving approaches, BTC currently trades at $65,106.55, showcasing a significant 3.69% increase over the past 24 hours. Bitcoin firmly maintains its position as the leading cryptocurrency with a dominant market cap of $1.28 trillion. This dominance, coupled with its $49.88 billion 24-hour trading volume, highlights Bitcoin’s continued influence and liquidity within the broader cryptocurrency market.
J.P. Morgan analysts foresee a temporary dip in Bitcoin’s price post-halving. Nikolaos Panigirtzoglou and his team anticipate the primary impact on Bitcoin mining firms, with the potential for decreased hashrate and consolidation within the sector.
However, other prominent voices in the crypto space offer a more bullish outlook. Gert van Lagen, a respected crypto analyst, notes Bitcoin’s parabolic rise since November 2022 and suggests the upcoming halving could fuel a surge toward the $200,000 mark.
Bitwise Chief Investment Officer Matt Hougan shares the bullish outlook. He forecasts Bitcoin’s price exceeding $200,000 this year, fueled by a significant supply-demand imbalance. Hougan believes that the introduction of spot Bitcoin ETFs will drive a surge in demand, further amplifying the impact of the halving’s supply constraints.
